Hospitals say recruiting docs is a high-priced game
Chris Bonura
There are few guarantees in life. But out-of-town doctors who move to the New Orleans area sometimes have their income guaranteed by the hospital where they admit patients.
Although, typically, the doctors work for private physician practices and not the hospitals, the hospitals will help them through the rough times usually associated with attracting patients to a new practice. The goal is to keep patients flowing to the hospital while correcting any shortages in doctor supply in the area.
The provisions in the contracts that govern these agreements, called relocation agreements, vary from case to case. But Mel Lagarde, who runs Louisiana hospitals that are owned by HCA-The Healthcare Company, says the agreements he signs often guarantee a primary care doctor an income of $150,000 for the first year. Specialists generally get a higher guaranteed income. The hospital provides whatever portion of that income a doctor can’t earn through seeing patients, he says. The hospital also usually pays for a doctor’s moving expenses.
Lagarde says the five acute care hospitals HCA owns in the New Orleans area generally need anywhere from two to 10 new doctors apiece each year. Lagarde says the agreements generally cost the hospitals about $20,000 each.
Dr. John Wise was attracted to the New Orleans area in 1998 partly because of a salary guarantee from Tenet HealthSystem. The 34-year- old doctor relished the opportunity to go to a fun city like New Orleans while still getting help starting his career. He says young doctors are often encouraged to move to rural areas to get the incentives. About six months ago, the Alabama native started his own practice and decided to stay with Memorial Hospital’s Baptist campus, which is owned by Tenet.
While there is nothing that forces him to return the favor, he says he feels a sense of loyalty to Tenet. I would feel bad if I just started admitting somewhere else, he says.
The agreements point to a hospital’s need for a regiment of staff doctors – those who actively admit to the hospital but who usually aren’t employed by the hospital. Business generated by doctors accounts for about 80% of the revenue at local Tenet hospitals, according to the company’s top local executive.
We look at physicians as both our partners and our customers, says Dr. Stephen Newman, senior vice president of operations for Tenet HealthSystem’s Gulf States Region. We realize that those relationships are built upon years of common interest and success.
That outlook translates into policies that include helping doctors grow their practices by adding new physicians recruited under the relocation agreements, Newman says. It also means keeping up with the technology that doctors need at the hospital and hiring respected hospital-based physicians – the anesthesiologists, pathologists and diagnostic radiologists who provide services for a doctor’s patients when they are in the hospital.
The federal government has recently clamped down on financial transactions that reward doctors for admitting patients to the hospital.
Newman says in years past hospitals would wine and dine physicians in an attempt to lure doctors’ patient admissions from competitors.
Federal laws have since put a stop to that practice, but the salary guarantees are allowed if a hospital can demonstrate that the new recruit is filling a community need, he says. The doctor must come from outside of the hospital market, usually considered an 80- mile radius, Newman says.
Hospital executives say relocation agreements are designed to help a problem that often plagues patients shopping for a new doctor: Medical practices that have reached their capacity often turn away new patients, or existing patients sometimes have to wait to get an appointment.
The concept is that without the help of the hospital, the physician practice wouldn’t have the wherewithal to recruit an extra physician that they need for adequate capacity, Newman says.
Julia Kitto, a practice manager for the Uptown offices of Drs. Louapre, Kokemor and Sarratt, says that doctors’ offices are appreciative of the help that hospitals provide them to help grow the practice. But she says the income guarantees don’t shield a practice from all of the financial risk associated with adding another physician.
The hospital guarantees the salary for the new doctor. But that doesn’t cover the malpractice insurance, the pager and whatever else a doctor needs to get started, she says.
The guarantees are helpful in getting a doctor through the first days on the job, she says. Until a doctor gets the credentials to see patients from managed care insurers, it’s hard to drum up business, she says. That process can take months.
Erie Hebert, a senior vice president for West Jefferson Medical Center, says the hospital doesn’t offer salary guarantees for its staff physicians. However, the hospital employs physicians at several clinics that it owns on the West Bank. Those doctors’ pay structure is designed to help a new doctor through the transition of changing practices, he says. Doctors are paid a set salary for the first two years and graduate to a performance-based salary, he says.
Hebert says the West Bank has an urgent need for more primary care doctors. The shortage of doctors has manifested itself in a high number of visits to the hospital’s emergency room, where patients go if they can’t get the services they need from a doctor’s office.
Hebert says West Jefferson is trying to attack the problem by adding more doctors to its seven primary care clinics, which have 15 physicians. West Jefferson has hired five new primary care doctors in the last year.
Copyright 2001 Dolan Media Newswires
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